Airline Mergers Linked to Longer Delays, U.S. Audit Finds

The relationship between the average length of a delayed flight and competition was “statistically significant and sizable,” the U.S. Department of Transportation’s inspector general found. Photographer: Chris Ratcliffe/Bloomberg

April 25 (Bloomberg) -- Flight delays and cancellations
rose as competition between carriers declined at U.S. airports,
according to a study ordered by Congress in the wake of airline
mergers.

The relationship between the average length of a delayed
flight and competition was “statistically significant and
sizable,” the U.S. Department of Transportation’s inspector
general found.

“When competition decreased, both the average length of
flight delays and percentage of total flights that were late
increased,” according to the report by Mitchell Behm, an
assistant inspector general.

Since 2005, mergers have winnowed the number of major
carriers to four: American Airlines Group Inc., United
Continental Holdings Inc., Delta Air Lines Inc. and Southwest
Airlines Co.

The length of time a flight was delayed increased by 25.3
percent when a market’s airline service shrank from three
carriers to two, the study found. The effect on the percentage
of late flights was smaller and barely statistically
significant, according to the report.

A market that went from three airlines to two also had a 7
percent increase in canceled flights, according to the study.

2,500 Routes

The inspector general didn’t say why changes in airline
competition may alter flight delays and cancellations. The
industry is overseen by DOT and the Federal Aviation
Administration.

“This type of economic analysis serves to inform FAA and
the Department of Transportation about the impacts of reduced
competition on airline service quality, and can be used as
information in future planning to advance an efficient air
traffic system for the traveling public,” the inspector general
said.

With the last of the major mergers completed Dec. 9 between
US Airways Group Inc. and American, the report comes too late to
have an effect on the wave of airline consolidations.

The study examined more than 2,500 U.S. routes flown by 20
airlines from 2005 through 2012. The inspector general developed
economic models to estimate the effects of competition on delays
and cancellations.

Last year 1.27 million flights were at least 15 minutes
late, or 22 percent, according to DOT’s Bureau of Transportation
Statistics. Airlines canceled 96,000 flights, or 1.5 percent,
according to the bureau.